Understanding the Role of Rural Non-Farm Enterprises in Africa’s Economic Transformation: Evidence from Tanzania uri icon

abstract

  • Tanzania's recent growth boom has been accompanied by a threefold increase in the share of the rural labour force working in nonfarm employment. Although households with nonfarm enterprises are less likely to be poor, a substantial fraction of these households fall below the poverty line. Heterogeneity in the labour productivity of rural nonfarm businesses calls for a two-pronged strategy for rural transformation. Relatively unproductive enterprises may be part of a poverty reduction strategy but should not be expected to contribute to employment and labour productivity growth. Failure to account for this heterogeneity is likely to lead to disappointing outcomes.

publication date

  • 2018
  • 2018